Amyloid deposited in the brains of Alzheimer's disease (AD) patients is composed of a 4kDa amyloid beta peptide or A-beta. A-beta is produced by sequential cleavage of the amyloid precursor protein (APP) by beta- and gamma-secretases. A novel type-1 integral membrane aspartyl protease BACE has been identified as the beta-secretase, and knock-out mouse models demonstrate that this enzyme is necessary for A-beta production in the mouse brain. The generation of A-beta by beta-secretase is a minor pathway of APP processing, resulting in 10% of APP processing to its secreted derivatives. Since BACE is a poorly active enzyme in vitro, it has been proposed that its activity is limiting in the cell. However, A-beta production increases by several orders of magnitude in transfected cells expressing high levels of APP without a corresponding increase in BACE activity. To explain these discrepant observations, the PI proposes the hypothesis that APP processing by BACE occurs in a specialized cellular compartment where its activity is not limiting. Instead, only a small pool of APP enters this compartment, accounting for the limiting processing of APP by BACE. This hypothesis is consistent with recent findings from the PI's laboratory indicating that BACE can be isolated as highly active high molecular weight complex from guinea pig brain. To further test this hypothesis, in aim 1 APP chimeras will be generated to target APP to specialized cellular compartments, and its processing will be examined. In aim 2, the effects of cholesterol, a known stimulator of beta-secretase processing, will be evaluated on the levels and activity of BACE complex. In aim 3, the basis of enhanced BACE activity in the complex will be evaluated. [unreadable] [unreadable]